Kuehne and Nagel International, the world’s biggest sea-freight forwarder, said second-quarter profit rose as the market for sea freight expanded and a reorganisation helped the company reduce costs.

Net income rose 6.3 per cent to 153 million Swiss francs (€124 million), meeting analyst estimates, Switzerland-based Kuehne and Nagel said today in a statement. Revenue rose 1.4 per cent to 5.3 billion francs.

Earnings before interest and taxes rose 8.2 per cent to 197 million francs.

Subdued economic activity is weighing on shipping companies as countries sharing the euro continue to struggle with the longest recession since the currency was introduced.

Kuehne is closing 92 locations in its rail and road unit to focus on profitable regions.

“The results underline that the measurements introduced to improve efficiency on a group-wide level are effective,” chairman and interim chief executive officer Karl Gernandt said in the statement.

“Although we do not anticipate a significant stimulation of global trade in the second half, we will continue to focus on profitable growth.”

Air freight volumes handled in the first half rose 4 per cent, in contrast with a contraction in the market, while container volumes rose 3 per cent, ahead of market growth of 1 per cent to 2 per cent, the company said.

Kuehne and Nagel reiterated a forecast that its sea-freight volume will rise 4 per cent to 6 per cent this year, outpacing market growth of 2 per cent to 3 per cent. Air-freight handled will increase 1 per cent to 3 per cent, compared with a market Kuehne now forecasts to decline by as much as 2 per cent.

Former chief executive officer Reinhard Lange stepped down May 7 for health reasons, with Gernandt now leading the company on an interim basis.

Bloomberg